BRANDING & SELLING

Dominated by private and listed companies, the pharmaceutical industry in Iran is looking for ways to sustain growth through international collaboration for under-license production and exports.

DR. ALI MONTASERI

Managing Director

Jaber Ebne Hayyan

After the Revolution, the Ministry of Health sought to produce all our medicine inside the country, and everybody was looking to achieve self-sufficiency. We invested a lot of money in machinery for the production of pharmaceuticals, and after that we generated a scheme that was very unique internationally. The government tried to support us and after that we had very good, high-quality technology and very high-quality products. Currently, around 94% of the units we consume we produce locally. By value it is a different story, because the products we import from outside are very expensive and rare. We spend a lot of money to obtain the 6% we need from exports. By value, 75% we produce locally, while 25% by value is imported.

In our company, around 80% of our products go to the market by brand name rather than under a generic name. We have promotional activities, have a marketing department, and visit Iranian doctors, hospitals, and pharmacies to promote our products. Doing so is the only way to be in the market, because there is a lot of competition in the local market. We have to go to the market with a brand name, and the brand name is not only the brand of the product. The brand of the company is also very important.

Frankly speaking, Iranian pharmaceutical companies are not known to multinationals. Just like many celebrities, companies tend to think that they're the best and never see the others. If they knew about our company, the next morning they would buy our shares and discuss under-license production with us. Iran is a vast country with a population of 75 million. All multinationals in the future will be eager to discuss the possibility of making products under-license with us, but they are as yet unfamiliar with the country.

At the present time Jaber Ebne Hayyan exports to neighboring countries such as Afghanistan, Iraq, Azerbaijan, Armenia, Tajikistan, and Ukraine. We also export our products to Africa, and gradually the number of markets is going to increase. The competition in other countries is very intense as our company has to compete with others. Our quality will prove who we are gradually in the future, and it takes time to be a great rival in the world market.

DR. AKBAR BORANDEGI

Managing Director

Sobhan Darou

The government introduced a population control strategy in the 1980s, and so we have seen lower population growth in recent years. On the other hand, the number of pharmaceutical manufacturers has increased over the past 30 years enormously. A professionally educated workforce has increased, because a lot of universities have been established. And the concentration of the pharmaceutical industry in the production of new formulations has increased. All of this has resulted in an increase in the number of pharmaceutical products on the market, which leads to closer competition between the companies, and this has had an effect on our group. The government's new policy has resulted in companies trying to improve their standards and quality in order to compete with each other in the market. Sobhan Darou has emerged as one of the best-known companies in terms of quality because we worked hard to upgrade our facilities and products.

We have full documentation in the pharmaceutical industry right now. We decided to import knowledge from outside to our factories and obtain improved documentation procedures and better production processes. Based on this work, we can think of exporting to other regions when the day comes. For international pharmaceutical companies, the advantage is that the finished products are priced lower here in Iran than in other countries, and because of the strict regulations and supervision of the government over the industry and our comparatively high quality. Compared with neighboring countries, Iran has greater potential to absorb investment in the industry. The production process is cheaper here in Iran because we have a lot of facilities and human capital here, so it will be cheaper than other countries, especially compared to our neighbors. When the finished production price is lower, the company will be more competitive.

Our government is already requiring importers to produce pharmaceutical products domestically after a few months of imports. That is a good choice because it increases the eagerness of companies to produce under license. A population of 70 million plus is a big market for the region. When international companies are not capable of exporting, they finally decide to produce these products locally, and so they search for a good company to work with.

We have a development project that will be ready in the next two years. It has a lot of good standards, and follows WHO guidelines. So, we foresee that 20 to 30% of our estimated turnover will be from exports.